22 October When an agency changes hands October 22, 2019 By Reef Admin Business practice 0 Does the transferring employee's service with the old employer count as service with the new employer? Buying another agency or purchasing a rent roll is something many real estate Principals will go through at some point in their business life and taking on some or all of the employees of the business being sold is not uncommon. Here are some key things you need to consider when it comes to transferring employee entitlements. Whether buying a complete real estate business or simply a rent roll, it’s common for some or all of the existing employees of the seller (the old employer) to be offered a position in the buyer’s business (the new employer). Unfair dismissal claims Where a new employer wants to exclude a transferring employee from being able to make an unfair dismissal claim for the excluded period* provided for in the Fair Work Act 2009, they must advise the employee in writing that service with the old employer won’t be recognised. If this doesn’t occur, then the period of service with the old employer will count towards service with the new employer. This means that, as the new employer, if you dismiss a transferring employee inside the unfair dismissal qualifying period, a claim can still be made against you. To address this issue, REEF can provide you with the appropriate wording to include in a transferring employee’s Employment Agreement. * The excluded period for a small business with less than 15 employees is 12 months and 6 months for all other businesses. Notice of termination The amount of notice you must give an employee when terminating them is determined by the length of their service and their age. A new employer is bound to recognise a transferring employee’s service with the old employer, unless the employee received the appropriate notice of termination (or pay in lieu) from the old employer. Therefore, you should ensure that the old employer provides all transferring employees with the appropriate notice. Personal/carer’s leave, long service leave and parental leave The new employer is bound to recognise an employee’s service with the old employer when calculating the entitlement to personal/carer’s leave, long service leave and parental leave. These entitlements must carry over to the new employer. Therefore, as the new employer, you should carefully consider the liability you will be assuming for such entitlements when the transferring employees start employment with you. Annual leave As a new employer, you have the option of whether or not to recognise a transferring employee’s service with the old employer for annual leave purposes. It’s common for new employer’s to insist that the old employer discharge their annual leave obligations in relation to all transferring employees. The bottom line When buying an agency or purchasing a rent roll, it’s essential for both the new and old employers to understand their respective obligations. If you have questions, give REEF a call on 1300 616 170. Our Workplace Relations Advisors are on hand to answer your questions. Related When does a salesperson start to add value to my agency? Success in any business requires a sound appreciation of the cost pressures that have an impact on the bottom line. In agency practice, one of the major pressures relates to the employment of staff. Buying an agency? You need to understand employee entitlements The sale of a real estate agency is something most business owners will face at some point. Here are some things to be aware of when it comes to employee entitlements. Fair Work Commission hands down Award review decision The wait is over! The Fair Work Commission has handed down its decision regarding the statutory review of the Real Estate Industry Award. Here are the details. Federal Rule changes endorsed by Executive Committee On 16 December 2016, the Executive Committee unanimously endorsed a number of Rule changes, which have now been lodged with the Fair Work Commission for its approval. Advocacy: REEF has your back when it comes to claims If you ever find yourself confronted with a workplace-based claim, REEF is on hand to help and will work with you every step of the way – and our advocacy service has been in high demand in recent times. Notice periods: When it all comes to an end How much notice needs to be given when bringing an employment relationship to an end? Here we answer some common questions about minimum notice periods for termination. Comments are closed.